Precious metals rally on freash concerns about inflation


Precious metals rallied on Wednesday, as worries about inflation reappeared. Investors bought into gold and silver back after a selloff earlier this week.

Gold for June delivery added. $15.80, or 1.1%, to $1,495.80 an ounce.

July silver rallied $1.61, or 4.8%, to $35.10 an ounce.

A rally for oil futures back at more than $100 a barrel conveyed back concerns about inflation.

Oil for June delivery capped $100 a barrel after a government supplies report showed unaltered inventories, adverse to analyst expectations of a increase.

The dollar declined against major currencies, providing an additional boost to commodities, which gained across the board.

The dollar index, which compares the U.S. unit to a basket of six currencies, traded recently at 75.289 from 75.441 in late North American trading on Tuesday.

A weaker dollar is beneficial to commodities, which are priced in dollars and are made more expensive by a rising U.S. currency.

For gold in particular, a lower dollar also brings back investors who have betted against the dollar and on rising commodities in the past months.


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